Progression of farmland tax value alarming
Like clockwork, the base value of farmland used for property tax assessment has been increasing. This chart shows the progression of the base value since 2003 and the range of values that result from application of the soil productivity factors. The dollar amount and rate of increase are alarming at a time when the assessments of most other properties have deflated in the market value system used in Indiana since 2003.
What farmers know is that the changes to the base value almost certainly result in a proportional increase in their tax bills. 2014 tax bills will be calculated on a base value of $1,760 which is derived using data from 2006 to 2011.
This is an 8 percent increase over last year and hits farmers at a time when commodity prices and farm income are dramatically lower.
The base value is averaged capitalized net income for the lowest five of six years. Because of delays in the data used in the formula, the four-year data lag creates the “perfect storm” where the base value is escalating and farm income is on the decline. The 2017 base value of $2,770 is derived using commodity prices and yields from 2008 to 2013.
Accordingly, the lower prices experienced by farmers in 2014 won’t hit the formula until 2018. IFB will keep members posted on this issue, but it’s time to let legislators know that farmland taxes are out of control.